Rodney Hide: Faulty figures sully deal for CBD

Markedly differing study results mean the benefits of rail are unclear. Photo / Chris Skelton
Markedly differing study results mean the benefits of rail are unclear. Photo / Chris Skelton

In one way, I am immensely pleased the new Auckland Council and the Government have agreed on a multibillion-dollar way forward for Auckland transport.

Three years ago such agreement within Auckland was impossible, let alone agreement with central Government.

Now we think nothing of it.

But in another way, I am bitterly disappointed. The political apparatus has worked but the underpinning analytical advice remains woeful.

I haven't got the space to expose the schoolboy errors that befuddle and bedevil the extensive and very expensive studies that drive the public transport decision - but I can readily show the studies' conclusions are junk.

The first study was the 2010 Business Case for the CBD Rail Link. That study favoured the rail link over the bus tunnel because it was cheaper: "The CBD Rail Link with three stations has costs in present value terms of $1.52 billion, which is approximately 60 per cent of the present cost of $2.64b for the Central Area Bus Tunnel with three stations."

The study didn't seek to quantify the benefits because "both alternatives are broadly equally effective at delivering the required extra capacity into the CBD, so a simplifying assumption is that the underlying benefits are comparable".

And so the 2010 study favours trains over buses because both options offer similar benefits and trains are way cheaper.

We then have last year's City Centre Future Access Study. Here's where it goes oopsy.

The costs of the train and the bus option are now comparable at $2.4b and $2.3b. But the benefits of the train option have now skyrocketed to greater than seven times the benefits of the bus option.

So you are looking to buy a car. You want one that's cheap and reliable. The salesman tells you that his car has exactly the same reliability as the one you have been looking at down the road, but is only half the price.

That's a good deal.

But you decide to check. Turns out the car down the road is the same price. You go back to salesman. He says yes, that's true, but his car is now seven times more reliable.

You wouldn't buy the car - and you wouldn't trust the salesman.

But that's exactly what's happened with the multibillion-dollar investment in public transport in Auckland, a decision that will shape transport and the city for all time.

The two studies reached the same conclusion, but with inverted reasoning.

For the first it was because the benefits were the same but the costs were different. For the second it was because the costs were the same but the benefits were different.

Go figure.

- Herald on Sunday

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